Congressional Democrats unveiled a new economic “action plan” to put a “Robin Hood” tax on Wall Street transactions and redistribute wealth from top earners to lower and middle classes (1/12).
The plan, introduced by Rep. Chris Van Hollen (D-Md.) with backing from House Minority Leader Nancy Pelosi (D-Calif.), places a 0.1% fee on financial transactions that would be rolled in with reductions in tax breaks for the top 1% of earners. The new taxes would reportedly add up to $1.2 tln over the next decade, which would fund a “paycheck bonus credit” of $2,000 a year for couples earning less than $200,000.
Other elements of Van Hollen’s proposal include incentivizing companies to raise worker pay by placing restrictions on tax treatment of executive salaries for companies that don’t also increase employees’ income, incentivizing worker training programs, nearly tripling the tax credit for child care and rewarding people who save at least $500 a year, Lauren McCauley noted at CommonDreams.org.
“This is a plan to help tackle the challenge of our times,” Van Hollen, a ranking member of the House Budget Committee, said during a speech at the Center for American Progress ahead of the official roll-out. “We want a growing economy that works for all Americans, not just the wealthy few.”
A day after Van Hollen unveiled his proposal, Sen. Sheldon Whitehouse (D-R.I.) released a “tax fairness plan” that would set a 30% minimum tax for people with multimillion-dollar incomes, regardless of credits and deductions they claim.
The bill has the support of a broad coalition of liberal and progressive senators, including Democratic Leader Harry Reid (D-Nev.), Tammy Baldwin (D-Wash.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).
Also part of the Whitehouse plan is the “Offshoring Prevention Act,” which would end the ability of corporations to defer taxes on profits earned or sent overseas, eliminating an incentive to take such actions as moving production out of the country. Another bill in the Whitehouse package revives a proposal championed by former Sen. Carl Levin that would end the ability of corporations to avoid taxes by funneling profits through overseas subsidiaries.
The three measures would mean an additional $370 bln in additional federal revenue over the next 10 years. “This revenue could provide substantial resources for investments in infrastructure and education, or could serve as a fairer way to fund new Republican initiatives than cuts to benefits that people rely on,” notes a fact sheet produced by Whitehouse’s office.
It comes at the same time that Rep. Paul Ryan (R-Wis.) led his first hearing as chairman of the tax-writing House Ways and Means Committee, where he wasted no time signaling his intention of pushing the conservative agenda of cutting corporate taxes and promoting spending cuts.
LAME DUCK ‘CROMNIBUS’ SHOWED BIPARTISAN SPLITS. Congress disappointed many progressives when it accepted a provision that allows federally insured banks to get back into highly speculative derivative swaps as part of the $1.1 trillion “Cromnibus” spending bill in December. The bill funded most of the federal government through September 2015, before Republicans gained control of the Senate, but the rider on the “swaps pushout rule” guts one of the 2010 Dodd-Frank financial reforms. However, the fight showed a potential progressive populist insurgency in the House and Senate that is willing to buck President Obama if necessary.
William Greider wrote in The Nation (12/12), “The congressional showdown has given us an exciting glimpse of what the future might look like if [House Minority Leader] Nancy Pelosi and Sen. Elizabeth Warren lead the way for a liberal insurgency. Both stood up and fired back at the stink of what Obama and many Dems had accepted. Warren and Pelosi did not personally attack their party’s doggedly passive president. But both essentially declared their independence from him. Their willingness to confront and counter the cynicism that passes for policy debate is a hopeful marker for larger change ahead.”
The 1,600-page Cromnibus passed the House (12/11/14) with a 219-206 vote, as 67 Republicans — mainly teabaggers — joined 139 Dems voting “no.” Then the bill passed the Senate (12/13/14) with a 56-40 vote, with 18 Republicans, 21 Democrats and independent Sen. Bernie Sanders of Vermont voting no.
Democratic no votes included Richard Blumenthal of Connecticut; Cory Booker of New Jersey; Barbara Boxer of California; Sherrod Brown of Ohio; Maria Cantwell of Washington; Al Franken of Minnesota; Kirsten Gillibrand of New York; Tom Harkin of Iowa; Mazie K. Hirono of Hawaii; Amy Klobuchar of Minnesota; Carl Levin of Michigan; Joe Manchin III of West Virginia; Ed Markey of Massachusetts; Claire McCaskill of Missouri; Robert Menendez of New Jersey; Jeff Merkley of Oregon; Jack Reed of Rhode Island; Jon Tester of Montana; Elizabeth Warren of Massachusetts, Sheldon Whitehouse of Rhode Island and Ron Wyden of Oregon. Of those, Harkin has left the Senate (and was replaced by teabag Republican Joni Ernst). That leaves a potential progressive populist bloc of about 21 in the Senate.
Republican no votes on the Cromnibus included Bob Corker of Tennessee; Michael D. Crapo of Idaho; Ted Cruz of Texas; Jeff Flake of Arizona; Charles E. Grassley of Iowa; Dean Heller of Nevada, Ron Johnson of Wisconsin, Mike Lee of Utah; John McCain of Arizona; Jerry Moran of Kansas; Rand Paul of Kentucky; Rob Portman of Ohio; Jim Risch of Idaho; Marco Rubio of Florida; Tim Scott of South Carolina; Jeff Sessions of Alabama; Richard C. Shelby of Alabama; and David Vitter of Louisiana.
(Earlier, the Senate voted 77-19 to stop a filibuster attempt, as 13 Republicans, five Democrats and Sanders voted to filibuster the bill. Democrats supporting the filibuster included Brown, Franken, Manchin, McCaskill and Warren.)
After the House vote, Politico reported (12/11/14) that the opposition to the provision weakening Dodd-Frank was as much about the policy in question as it was about preventing Wall Street from establishing a blueprint for chipping away at the financial reform bill one provision at a time.
Another controversial measure in the Cromnibus allows the benefits of current retirees to be severely cut if necessary to save some of the nation’s most distressed pension plans. The change would apply to multi-employer pensions, where a group of businesses in the same industry join forces with unions to provide pension coverage for employees. The plans cover 10 mln US workers.
There are about 1,400 multi-employer plans, many of which remain in good fiscal health, Michael Fletcher noted in the Washington Post (12/9/14). But several dozen have failed, and others are staggering toward insolvency. As many as 200 plans covering 1.5 mln workers are in danger of running out of money over the next decades. The idea of cutting benefits is reluctantly supported by some unions and retirement fund managers who see it as the only way to salvage pensions in plans that are in imminent danger of running out of money.
One of those troubled plans is the Teamsters’ Central States fund, which has been stressed by steep membership declines, an aging workforce and downturns in the stock market that have put the retirement benefits of 400,000 participants in jeopardy.
Central States pensions are among the best enjoyed by working-class retirees: After 30 years on the road, many are entitled to upward of $3,000 a month for the rest of their lives. But the fund has about $18 bln in assets, it pays annual benefits of $2.8 bln to retirees, and it receives just $700 mln each year from employers. Even with with strong stock market returns of recent years, that puts the plan on course to run out of money within 10-15 years.
Under the agreement reached by congressional negotiators, retirees over age 80 as well as those who are disabled would be shielded from any reductions. Also, benefit cuts would be subject to a vote of plan participants.
Nonetheless, many retirees feel betrayed, the Post reported. “I never dreamed they would pull the rug out from under us,” said Greg Smith, 66, a retired shipping clerk who retired in 2011 with a $3,000-a-month pension after 42 years on the job. “I actually retired because I was worried about them cutting pensions. I thought I would be grandfathered in with protections. But I guess not.”
See a summary of pension provisions and a calculator to figure out how much benefits could be cut at pensionrights.org.
WHAT DEMOCRATS GOT OUT OF THE ‘CROMNIBUS’. Kevin Drum noted at MotherJones.com (12/12/14) that, according to Politico, Barbara Mikulski (D-Md.) agreed to keep the swaps pushout provision in the bill in exchange for more funding for the Commodity Futures Trading Commission and the Securities and Exchange Commission, according to aides.
Rep. Jim Moran (D-Va.), who was retiring, defended the compromises, noting that it implemented the Affordable Care Act, put more money into early childhood development, gave more money to the EPA than the administration asked for — although it’s still down $60 mln from the last fiscal year — and got the Republicans to drop 26 riders that would have devastated administration of the Clean Water and Clean Air Act. “So we got virtually everything that the Democrats tried to get,” Moran said.
The White House noted that the bill provides full-year appropriations for most government functions, “while making progress toward appropriately investing in economic growth and opportunity, and adequately funding national security requirements. The Administration also appreciates the authorities and funding provided to enhance the US Government’s response to the Ebola epidemic, and to implement the Administration’s strategy to counter the Islamic State of Iraq and the Levant, as well as investments for the President’s early education agenda, Pell Grants, the bipartisan Manufacturing Institutes initiative, and extension of the Trade Adjustment Assistance program.”
REPUBS AIM TO REPEAL IMMIGRATION ORDER. The “Cromnibus” bill that passed in December provided funding for the Department of Homeland Security only through February. As part of the must-pass funding bill for Homeland Security, the House GOP (1/14) narrowly passed a provision (that also would repeal President Obama’s executive order to defer deportation of more than 5 mln undocumented aliens who have family ties to US citizens or are DREAMers — young people who were brought to the US by their parents. Republicans also are trying to undo DHS’s enforcement priorities, which target serious offenders rather than indiscriminately going after longtime law-abiding aliens.
Politico reported (1/13) that the effort to step up deportations of DREAMers could split the Republican caucus, with at least a dozen Republicans opposed to the effort to kill the Deferred Action for Childhood Arrivals program. Rep. Jeff Denham (R-Calif.) said the effort to roll back immigration enforcement directives dating as far back as 2011 is “an overreach” and could cause him to oppose the underlying DHS funding bill.
The immigrant-bashing amendment was included in the bill by a 218-209 vote and the House then passed the DHS bill 236-191 (1/14). Ten Republicans opposed final passage and two Democrats supported it. Republicans opposing the bill were Reps. Justin Amash (Mich.), Mike Coffman (Colo.), Carlos Curbelo (Fla.), Jeff Denham (Calif.), Mario Díaz-Balart (Fla.), Robert Dold (Ill.), Renee Ellmers (N.C.), Thomas Massie (Ky.), Ileana Ros-Lehtinen (Fla.) and David Valadao (Calif.). Brad Ashford (Neb.) and Collin Peterson (Minn,) supported the bill.
The bill faces opposition in the Senate from Democrats and some Republicans in states with large Latino populations. The White House also has threatened to veto the DHS bill if it contains the immigrant-bashing rider.
BOXER RETIREMENT SHAKES UP CAL POLITICS. When Sen. Barbara Boxer announced that she would not seek re-election in 2016, the retirement of the progressive Democrat was a seismic event for California politics.
Attorney Gen. Kamala Harris announced (1/13) that she would run for Boxer’s seat, saying she would be “a fighter for the next generation on the critical issues facing our country. I will be a fighter for middle class families who are feeling the pinch of stagnant wages and diminishing opportunity. I will be a fighter for our children who deserve a world-class education, and for students burdened by predatory lenders and skyrocketing tuition. And I will fight relentlessly to protect our coast, our immigrant communities and our seniors.”
The Democratic Senatorial Campaign Committee issued a press release praising Harris, but other Democrats also are eyeing the race, including Rep. Loretta Sanchez, a moderate “Blue Dog” Democrat who released a statement that she is “seriously considering” a run; former Los Angeles Mayor Antonio Villaraigosa; and Tom Steyer, a billionaire who has supported environmental causes but has never held elective office. Lt. Gov. Gavin Newsom, who has been a close ally of Harris, ruled out a bid.
On the Republican side, state Assemblyman Rocky Chavez has confirmed his interest. Jeff Singer noted at DailyKos.com (1/14) that if too many Democrats run in the all-party primary, there’s a chance that two Republicans could advance to the general election runoff. “It’s unlikely, but Chavez may decide to play the odds,” Singer noted.
POSTAL SERVICE CUTS DELIVERY STANDARDS. The US Postal Service reduced delivery standards (1/5) and began a process that will slow first-class mail delivery as part of a cost-cutting program to help the Postal Service prepay retirement benefits for postal workers who haven’t been born yet. As The Nation’s John Nichols wrote (12/23), the service cutbacks come on the heels of record-breaking and successful holiday deliveries of 15.5 bln packages, letters and parcels by postal workers, letter carriers, mail handlers and rural carriers in weeks of “intense demanding, long-hours, late-night and weekend work.”
American Postal Workers Union (APWU) President Mark Dimondstein said, “It’s an outrage. Eight years after Congress ginned up a fake financial crisis for the Postal Service [with a 2006 requirement that the service prefund retiree benefits for the next 75 years, at $5.5 bln a year], its members still refuse to take even the smallest steps to prevent a major hit on this great national treasure.”
APWU, the Letter Carriers, Mail Handlers and Rural Letter Carriers unions urged Congress to implement a one-year moratorium on the service cutbacks but lawmakers left town in December without acting. A group of 30 senators and representatives called on the USPS to delay the changes: “There is no reason that the USPS cannot delay its consolidations to provide time for the public to see and comment on the service standard worksheets. It is only fair to allow the process to unfold in this way, and the USPS gains little by deciding to continue the consolidation process on its current, arbitrary timeline.”
Sen. Bernie Sanders (I-Vt.), in a Senate speech (12/4) warned that the planned cuts of 82 mail-sorting centers and 15,000 jobs will gut first-class mail standards and “lead to a death spiral of lower-quality service, fewer customers, more cuts, less revenue and eventually the destruction of the Postal Service.” But House Republicans refused to consider a plea by 51 senators and 160 House members who signed a letter supporting a moratorium on the cuts.
Sanders also noted that the Postal Service would have shown a profit over the past two years except for the excessive pre-funding requirement for retirement benefits that was slipped into a spending bill in the 2006 lame duck session at the request of President George W. Bush. “This onerous and unprecedented burden that costs $5.5 bln a year is responsible for all of the financial losses posted by the Postal Service since October 2012,” Sanders said.
NEW RULE STREAMLINES UNION ELECTIONS. The National Labor Relations Board (12/12/14) adopted a rule that is expected to reduce delays in representation elections and make it easier for workers to form a union in a timely manner when it takes effect in April. “Too often, lengthy and unnecessary litigation over minor issues bogs down the election process and prevents workers from getting the vote they want,” AFL-CIO President Richard Trumka said. “We comment the NLRB’s efforts to streamline the process and reduce unnecessary delay.”
The board adopted a similar rule in 2011 but the business lobby argued that the board lacked a quorum when it issued the rule, which blocked its implementation.
HOUSE VOTES TO GUT FINANCIAL REFORMS. House Republicans, with an assist from 29 bank-friendly Dems, voted to gut the Dodd-Frank Wall Street reforms, 271-154 (1/14)
The bill, titled “Promoting Job Creation and Reducing Small Business Burdens Act, was driven by Big Bank lobbyists and rolls back many of the key reforms. It would allow banks to hang onto billions of dollars in risky collateralized loan obligations for two additional years by amending the Volcker Rule, which is part of the 2010 Dodd-Frank financial reform law. The rule bans banks from speculating in securities markets with taxpayer-backed funds. A Volcker Rule delay would be a major boon to the nation’s largest banks. Between 94 and 96 percent of the domestic collateralized loan obligations (CLO) market is held by banks with at least $50 bln in assets, according to federal regulators, who value the market at between $84 bln and $105 bln. The bill also would water down rules on private equity firms, loosen regs on derivatives and weaken transparency rules.
During the first week of the Republican-controlled Congress, House Democrats derailed an attempt by Republicans to fast-track the bill. Pelosi got 80% of the Democratic caucus to oppose the bill and stop the fast-track consideration under special rules, which require a two-thirds majority — an impressive feat when pro-Wall-Street bills regularly get 100 more Democratic votes. The bill was supported by 276 of the 435 House members, including 35 Dems.
Progressives should contact their senators and the White House to raise their defenses against the bill and similar riders that can be attached to other must-pass bills during the next two years.
House Dems voting to gut Dodd-Frank on the fast track included Brad Ashford (Neb.), Ami Bera (Calif.), Don Beyer (Va.), Sanford Bishop (Ga.), Julia Brownley (Calif.), Cheri Bustos (Ill.), John Carney (Del.), Gerry Connolly (Va.), Henry Cuellar (Texas), John Delaney (Md.), Suzan DelBene (Wash.), Elizabeth Esty (Conn.), Bill Foster (Ill.), John Garamendi (Calif.), Gwen Graham (Fla.), Jim Himes (Conn.), Hank Johnson (Ga,), Derek Kilmer (Wash.), Ron Kind (Wis.), Rick Larsen (Wash.), Dan Lipinski (Ill.), David Loebsack (Iowa), Sean Maloney (N.Y.), Patrick Murphy (Fla.), Scott Peters (Calif.), Collin Peterson (Minn.), Jared Polis (Colo.), Mike Quigley (Ill.), Raul Ruiz (Calif.), Bobby Rush (Ill.), Kurt Schrader (Ore.), David Scott (Ga.), Terri Sewell (Ala.), Kyrsten Sinema (Ariz.), Albio Sires (N.J.).
WARREN, PROGRESSIVES SINK OBAMA TREASURY NOMINEE. Wall Street banker Antonio Weiss has asked President Obama not to renominate him to be the Treasury Department’s undersecretary for domestic finance after encountering opposition from Sen. Elizabeth Warren (D-Mass.) and grassroots progressive groups who criticized his Wall Street ties. Weiss wrote President Obama in early January saying he doesn’t think the Treasury Department “would be well served” by the lengthy confirmation process his nomination would entail, given the level of Democratic opposition he has faced. Instead, Weiss has accepted a job as a counselor to Treasury Secretary Jack Lew, a post that doesn’t require congressional approval.
In Weiss’ new role, he will provide Treasury officials with advice on domestic and international issues, including financial markets, regulatory reform, job creation and fostering broad-based economic growth, according to Lew’s statement.
The news is a major victory for Warren and progressive groups who have been criticizing Weiss’s nomination since November, when Warren first wrote an op-ed railing against the revolving door between Wall Street and government regulators. She argued that Weiss, a senior banker at financial giant Lazard whose work centered on international mergers, isn’t even qualified for a job that involves overseeing consumer protection and domestic regulatory functions at Treasury.
LEGISLATORS LOOK AT INCREASING WAGES. Although the economic collapse that was the Bush Recession may be over, state leaders know it’s not all blue skies ahead for the economy.
Jennifer Burnett, program manager for fiscal and economic policy at The Council of State Governments, said while the economy is steadily gaining jobs, wages are not increasing.
“The recovery has really reached a turning point, and state leaders are starting to think about the future, instead of just digging out of a hole,” Burnett said. “They are going to be looking for ways to not just create one more job and bring the unemployment rate down one more point, but how to create high-paying jobs—jobs that have a future.”
According to the US Conference of Mayors, the average annual wage for jobs lost in the recession was $61,637, but the average wage for the jobs added through the second quarter of 2014 was just $47,171. Increasing wages, not just the number of jobs, will be the top fiscal issue on state policymakers’ minds this legislative session, Burnett said.
“So far, the recovery has seen a lot of job growth in low-income sectors while jobs in higher paying sectors that really propel the economy forward have been more elusive,” she said. “Now that the crisis is over, it is time to start looking at quality instead of just quantity when it comes to job growth.”
BAD BILLS STAND OUT AS CONGRESS DEBUTS. James Downie of the Washington Post (1/13) looked at the more than 200 bills Republican senators and representatives proposed in the first week of the new Congress, and found that Republicans’ priorities are clear: “They want to deregulate the environment, repeal Obamacare and derail the president’s immigration plans. Those were the three most common topics of the bills introduced, along with bills or resolutions to cut spending, force a balanced budget or restrict Obama’s options the next time the United States hits a debt ceiling crisis. Economic packages were almost entirely absent, relegated to secondary reasons for deregulating the environment or repealing Obamacare.”
Fresh ideas on either immigration or health care are noticeably absent as well, Downie noted. Rep. Steve King’s ObamaCare Repeal Act runs less than 180 words, “just long enough to repeal the law with no replacement. Rep. Ted Yoho’s ‘Preventing Executive Overreach on Immigration Act’ just prohibits the president from carrying out his immigration executive order (again offering no replacement plan), which would be a great solution if Congress had any constitutional authority to do that.”
Other standouts from the Republicans’ first week:
• Rep. Marsha Blackburn (R-Tenn.) offered three spending bills that would cut most discretionary spending by 1, 2 and/or 5 percent. “Her remarks and press statement don’t explain why she offered a choice rather than combining them into one big 8% cut.”
• Rep. Scott Garrett (R-N.J.) sponsored HR 116, which “would allow a small business operating in the United States to elect to be exempt from any federal rule or regulation issued on or after January 20, 2009.”
• Sen. David Vitter (R-La.), who is running for Louisiana governor this year, was a fountain of bad ideas, Downie noted, but perhaps his best was S. 63: “A bill to require all public school employees and those employed in connection with a public school to receive FBI background checks prior to being hired, and for other purposes.” Downie added, “There is no word on whether teachers would be disqualified for using prostitutes” (as Vitter did).
WIND GENERATES 98% OF SCOT HOME POWER. Scotland’s wind turbines generated enough electricity to cover 98% of households in 2014, Juan Cole noted at JuanCole.com (1/4). In addition, in some months of the spring and summer, homes with solar panels generated all the electricity the household used.
Scotland tripled its solar installations in 2014.
Households consume 41% of the electricity in Scotland, while industrial and other facilities use the other 59% Scotland is well on its way to getting 100% of its energy from renewable sources by 2022.
In Germany, renewables (wind, solar, hydro and biomass but mainly wind and solar) for the first time topped 25.8% of the total energy generated in that country, and it became the single largest source of electricity, outstripping lignite coal.
Critics of Germany’s Energy Switch in recent years have snidely pointed out that as it closed nuclear plants, its use of coal was increasing. But Germany is rapidly replacing nuclear and coal with wind and solar, so much so that coal use was down 11% last year.
Carbon emissions in Germany were down 5% in 2014, while Germany added 3.3 gigawatts of power from wind in 2014.
Japan has put in 11 gigawatts of new solar power in the past 2 years, after the Fukushima tsunami knocked out six nuclear reactors. Among the new projects yet to go online is an enormous floating solar farm. Most of Japan’s 71 gigawatts of planned new energy generation is solar.
Cole noted, “Some think that coal and natural gas only have a decade to go before solar in particular is so cheap it will drive them out of business.”
From The Progressive Populist, February 1, 2015
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